The US statement notes that Panama-flagged ships 'carry a meaningful share of US trade, and unwarranted, retaliatory vessel detentions in Chinese ports could have significant commercial and strategic consequences for US shipping'.

A U.S. maritime regulator has warned that China’s increased port state control actions against Panama-flagged vessels are ongoing and could eventually bring Chinese-controlled carriers involved in U.S. trade into the regulatory spotlight. Meanwhile, in a statement expressing her personal views published by the U.S. Embassy in Panama and the Federal Maritime Commission (FMC) website, Commissioner DiBella reiterated concerns about China’s ‘weaponisation’ of port state control inspections against Panama-flagged vessels.

The inspections were 'retaliatory'.

The inspections were described as "retaliatory," and it was said that they appeared to be aimed at punishing Panama over its Supreme Court decision to invalidate the concession previously held by Hong Kong-based CK Hutchison to operate the Balboa and Cristóbal terminals on the Pacific and Atlantic sides of the Panama Canal.

Panamanian Supreme Court ruling

A ٍSupreme court in Panama said earlier this year that the deal given to Panama Ports Company S.A. (PPC) to run the ports at the Panama Canal was against the law. The company had run the ports under this deal since 1997. The US accused China of detaining Panama-flagged ships in response to Panamanian authorities taking over the Hong Kong-based company's management of the ports of Balboa and Cristóbal.

The DiBella statement

In her statement, DiBella said that port state control inspections of Panama-flagged vessels had continued 'with no sign of abatement'. The statement notes that Panama-flagged ships 'carry a meaningful share of US trade, and unwarranted, retaliatory vessel detentions could result in significant commercial and strategic consequences for US shipping'. The statement also highlights that these ongoing detentions cannot simply be normalised. This, she said, would set a highly negative precedent for the global supply chain.

 The Chinese Ambassador, refuted the claims.

Xie Feng, Chinese Ambassador and Permanent Observer to the Organisation of American States, refuted accusations made by Panama regarding China's port state control inspections of incoming vessels. Stressing that China always attaches great importance to maritime traffic and personnel safety as a major shipping country, Xie made this statement while attending the Dialogue with Permanent Observers of the Organisation of American States in Panama on 23 June.

It is worthy of note that the dispute has transformed a standard compliance process into a flag-specific operating concern. If the issue is treated as an unfair practice affecting U.S. foreign trade, Chinese-controlled carriers could face more attention from U.S. regulators, while ships flying the Panama flag may face more scrutiny in Chinese ports.

#Xie Feng #Commissioner DiBella #U.S. maritime #Panamanian Supreme Court #Chinese ports #detentions #US trade#FMC#Panama-flagged vessels